Duration Bank Has the Following Assets and Liabilities as of Year-End

question 11

Multiple Choice

Duration Bank has the following assets and liabilities as of year-end. All assets and liabilities are currently priced at par and pay interest annually. What is the change in the value of its assets if all interest rates decrease by 1 percent?

• A)Approximately $1.613 million.
• B)Approximately $2.297 million.
• C)Approximately -$1.937 million.
• D)Approximately $2.209 million.
• E)Approximately $2.524 million.

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Definitions:

Gasping

The act of taking quick, short breaths through the mouth, often as a result of shock, surprise, or needing air.

Mortality Rates

The measure of the number of deaths (in general, or due to a specific cause) in a particular population, scaled to the size of that population, per unit of time.

Sleeping Hours

Sleeping hours refer to the duration of time that an individual spends in sleep within a 24-hour period.

Night Terror

A sleep disorder causing feelings of terror or dread, and typically occurs during non-REM sleep.